Old National Bancorp (NASDAQ:ONB): Immense Growth Potential?

Old National Bancorp’s (NASDAQ:ONB) latest earnings announcement in December 2018 confirmed that the company benefited from a large tailwind, eventuating to a high double-digit earnings growth of 99%. Below, I’ve laid out key growth figures on how market analysts view Old National Bancorp’s earnings growth trajectory over the next few years and whether the future looks even brighter than the past. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.

Check out our latest analysis for Old National Bancorp

Market analysts’ prospects for next year seems optimistic, with earnings climbing by a robust 22%. This growth seems to continue into the following year with rates reaching double digit 35% compared to today’s earnings, and finally hitting US$296m by 2022.

NasdaqGS:ONB Past and Future Earnings, April 15th 2019
NasdaqGS:ONB Past and Future Earnings, April 15th 2019

While it is helpful to understand the growth rate year by year relative to today’s level, it may be more insightful to estimate the rate at which the business is rising or falling on average every year. The benefit of this technique is that we can get a bigger picture of the direction of Old National Bancorp’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I’ve inserted a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 12%. This means that, we can presume Old National Bancorp will grow its earnings by 12% every year for the next couple of years.

Next Steps:

For Old National Bancorp, I’ve put together three important factors you should look at:

  1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
  2. Valuation: What is ONB worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether ONB is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of ONB? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.